CO2 Conference speaker has new way to count DUCs

Says Railroad Commission's 'Pending' file offers more accurate count

Since the early days of oil and gas activity in the Permian Basin, there have been 49,000 San Andres wells drilled and 3 million acres have been covered, said Hall, who said an estimated 6.5 billion barrels of oil have been produced from those San Andres wells. It's estimated the horizontal San Andres wells that have been drilled are producing about 35,000 barrels per day.

Since the early days of oil and gas activity in the Permian Basin, there have been 49,000 San Andres wells drilled and 3 million acres have been covered, said Hall, who said an estimated 6.5 billion barrels of

Since the early days of oil and gas activity in the Permian Basin, there have been 49,000 San Andres wells drilled and 3 million acres have been covered, said Hall, who said an estimated 6.5 billion barrels of oil have been produced from those San Andres wells. It's estimated the horizontal San Andres wells that have been drilled are producing about 35,000 barrels per day.

Since the early days of oil and gas activity in the Permian Basin, there have been 49,000 San Andres wells drilled and 3 million acres have been covered, said Hall, who said an estimated 6.5 billion barrels of

The opening topic for Wednesday's session of the annual CO2 Conference at the Horseshoe was to be the Horizontal San Andres play that is developing in the Central Basin Platform and Northwestern Shelf.

But the first speaker, Russell K. Hall of R.K. Hall and Associates, thought it was important to correct what said was an incorrect assumption about the number of drilled, uncompleted wells in the Permian Basin.

Hall cited a report that stated that between September and October, the biggest increase in DUCs was in the Permian Basin. According to the report, the basin added 249 DUCs for a total of 3,866 – a 6.9 percent gain.

Those numbers are wrong, he told the audience, saying the figure of Permian Basin DUCs is about 1,603.

Hall said a well could be stimulated and producing but the operator has not yet filed an initial production report with the Railroad Commission.

He said the DUC count is wrong because of the "pending" category in the commission's online production report queries system.

"If an operator is producing a well, he has to report it to the Railroad Commission," Hall said. "Some operators postpone reporting production for a month, two months, for a period of time. One reason could be they've found something and don't want anyone to know about it. They're actively leasing and don't want to let the cat out of the bag. Another reason may be the commission is bogged down -- a lot of reports come in and it takes time to complete the paperwork."

He urged those in the audience to test his theory by checking out the "pending" category on the commission's online system and entering the drilling permit number. He showed a slide of one such search result that showed a Surge Operating well that had produced 80 barrels by the end of September. He said only the drilling permit number results in a successful search. Entering the API number for example, will bring the response "no packet found."

"If you get the response 'no packet found,' that means no completion report has been filed. If you go by that, you're only getting part of the story," he said.

In any given month, there are 1,000 to 1,100 Permian Basin wells in that pending category, he said.

"Why do DUCs exist? First, what's happening in the Permian Basin. Two or three years ago, wells were being drilled to hold acreage. That's not really the most efficient way to develop acreage. Today, most acreage has been defended, and operators are transitioning to pad drilling, drilling three or four wells on the same pad. When you fracture a well, you will see frac hits in offset wells up to a half-mile away. The best way to avoid frac hits is to drill a number of wells together and frac them at the same time."

Operators are not drilling wells and letting them sit idle while waiting for better oil prices, Hall said. "They're waiting for the offset wells to be completed at the same time."

Having clarified an accurate DUC count, Hall then turned to his topic, the Horizontal San Andres play.

Since the early days of oil and gas activity in the Permian Basin, there have been 49,000 San Andres wells drilled and 3 million acres have been covered, said Hall, who said an estimated 6.5 billion barrels of oil have been produced from those San Andres wells. It's estimated the horizontal San Andres wells that have been drilled are producing about 35,000 barrels per day.

"The reservoir is complex," Hall told his audience. "When you think you've got it figured out, something happens that we have to figure out."

The residual oil zone concept operators are working with is strongly supported by the data, he said. But diagenetic changes in those zones may be more important than the depositional environment.